PUMP & DUMP FRIDAY EDITION

                                  You Did What In The Euro?

I came into today’s trading extremely risk averse; A) it’s Friday, B) the U.S. has 4 day weekend with Memorial Day Holiday, and C) Greece and Spain are imploding. Just about every cross-current you can think of was in play today. To say the markets are nervous is a vast understatement.

Today I lost a #6 meal at McDonald’s. I gave it a couple of shots in the EURUSD and the market just wouldn’t go on the algorithm signal. If I had waited and given the trades more room [read more risk] they would have made us a little money, but at the expense of a much higher threshold for loss. Sorry, not today, and not this Friday. I’ll get the meal back next week. No biggee.

The algorithm actually performed very well in this Friday mess; at the bottom today in the EURUSD it gave a nice buy signal that I chose to ignore because of the weekend risk. But again, the risk in my view wasn’t worth the potential gain. I don’t like trades that are asymmetrically skewed against me.

For those of you who are relatively new to trading [5 years or less], I want to impress upon you the degree to which trading, these last couple of months, has evolved into. I often mention the “Flying Wedge of Death” [FWD], for the simple reason it is a big account killer. Double and triple reversal days, with large ranges, are simply a version of the FWD where the back side just keeps going instead of stopping; so, the “W” at the end is taller/lower.

I can remember years where you didn’t see 2 double reversals the whole year, and as I stated the other day I don’t think I’ve seen 5 triple reversals in 30+ years of trading; they are that rare in gold and currency trading. Now, in the agricultural and food commodities sphere, you see these all the time, but not in the financials.

As a professional trader, I know that my top priority is to avoid these FWD and be aware of reversal days; nothing kills an account greater than these two. We have seen an inordinate number of these over the last few months; in fact more in the last 2 – 4 months than in the last 5 years total. This has been the single biggest reason I have scaled back my leverage and become cautious in my approach.

OK, so I take a couple of extra months making you a millionaire; so what?

With my most recent update and revision to the algorithm [The Vegas Multi Time Algorithm, which is the newest version of the old BFSG Algorithm and not available to the public – only PAMM clients], by definition we can’t get hurt by these developments. We might not make much money when they occur, but any losses are insignificant to our goal.

Next week will be our last full week of trading at HotForex. If you would like more information on becoming a PAMM client at our new brokerage house, drop me an email at vegasxau@ymail.com and I will send details.

Have a good weekend everyone.

-vegas

WHAT HAPPENS NOW?

                                                Oyyyyyyy !!

Today we saw trading in EURUSD and AUDUSD that very few will ever see; [near] triple reversal days. I can’t remember 5 times I have ever seen this in 30+ years of trading currency pairs. Wow. Seriously, WOW!

We made a little money today trading EURUSD, where the algorithm did a good job of picking entry points. If price had gone another 6 pips on the high, we would have gotten a great short position, but it missed by only that much.

Gold is a complete mess; there is no way I’m trading it in its present market condition. There simply is no way to gauge risk in a position. $3 - $5 stops are a joke; you would be lucky to get your stop in before it went $3 - $5 either way, that’s how random price change has become. $10 breaks/rallies don’t mean anything. Throw into the equation dealer spreads and slippage and there is no way. Sure, you can get lucky, but your losses will be killer to your account.

The algorithm, after some very recent revisions and updates, is performing very well in the currency pairs. I have intentionally been using low leverage in the past couple of days to trade given current market conditions to verify the recent changes as profitable; simple as that. I don’t optimize data and turning points when updating the algorithm; I care about now, not 5 years ago. I make changes based on theoretical and philosophical trading ideas and then incorporate them into the algorithm.

Leverage is ample and risk can be optimally controlled with the changes I have made. So, look for my leverage [and profits] to increase in EURUSD and AUDUSD as we go forward here.

As I mentioned yesterday, if you are a current PAMM client or interested in being in the new PAMM at our new brokerage house, contact me for details on how to make the transition. If you have any questions email me at vegasxau@ymail.com

Have a good day everyone.

-vegas

FALLING DOWN

                    Nothing Goes Down Faster & Better Than Gold

Unbelievable.

We are at the point in gold where, unless you are willing to commit account destruction to be right, every trade has no risk management. Needless to say, you can count me out when conditions get like this.

We made a few dollars today, trading both EURUSD and AUDUSD. The algorithm did very well in the currency pairs; gold was a complete mess.

As I stated earlier, because of the way gold is trading, the currency pairs are doing better with the algorithm and are producing more stable profits. Expect more trading in AUD and EUR.

News flow out of Europe continues to dominate, and it’s only a matter of time until Greece leaves the Euro and markets get really roiled. The EURUSD has broken down too fast to allow the big money to exit gracefully. Expect every short covering rally to be sold aggressively. Ultimately, I’m thinking with a Greece exit we could see EURUSD sub 1.10. We’ll see, but I’m pretty sure it would happen over a weekend; this would give some time to banks.

If you haven’t started the paperwork for the new PAMM, send me an email and I will send details of our transition to our new brokerage house. Some of you should be in the process of getting monies into the new brokerage house. If anyone has any questions or problems please let me know via email at vegasxau@ymail.com.

Have a good day everyone.

-vegas

NICKEL & DIMED

                                 Now This Is Having A Bad Day

This entire day was just ugly; gold, currencies, stocks, take your pick. All night and day I just got nickeled and dimed the whole time. We had the dreaded “Flying Wedge of Death” in gold today, wrapped around $20 down, $18 up, and then $22 down with the obligatory $5 rally into the close to trap some shorts once again. I managed to avoid most of it, and the few bucks we did lose came about via slippage on fills [something that will hopefully end when we leave HotForex].

The money lost today isn’t much in dollar terms; a few large pizzas. What bothers me is the price action; long stretches of nothing and then quick violent bursts. You are either in the train, or you are left standing at the station; nothing in between. Up or down, it didn’t make any difference, as they both came out of nowhere at different times in today’s trading session.

Currency pairs weren’t much better; just ugly action on both sides.

What can I say really; the algorithm gave the signals and we got our trades. When the market turned it went so fast that the small profits we had on the trades were losers within a second. You just hope when you hit the button the dealer isn’t going to take you out back and shoot you.

 Tomorrow’s another day.

Have a good day everyone.

-vegas

A NOTHING DAY

                                He Doesn’t Want To Play Either

There was some good activity in Early Asia that led to a vicious short covering rally in EURUSD; concurrently with that gold rallied up to 1599. But after that trading activity died down in gold until the U.S. session where we got about 2 hours of trading before things stabilized around the 1590 area.

Outside of the various dealer and Central Planner stop hunts it was a dead day. Gold especially was tight with only a $14 range for the day and only one move really in the U.S session that was of any significance. The algorithm caught that trade pretty well.

The good trade in gold was offset by a loss in the EURUSD. I gave AUDUSD a shot also, with a small trade, but it just wouldn’t move so it was basically a scratch trade for nothing. Net for the day was a loss of a few bucks, nothing of any significance, but it is frustrating watching these markets just sit and chop. Outside of the stop hunt in Early Asia, the ranges in everything were very poor today.

Have a good day everyone.

-vegas

TYPICAL FRIDAY TRADING

                                    Some Things Never Change

I made a couple of trades today; one in gold the other in EURUSD, and we added about a 0.1% gain. Once again, everything was pretty much in Asia and at the start of Europe and very little in the U.S. session. Asia is becoming either totally active or totally dead and not much in between. Remember just a few short days ago when Asia & Europe combined had a $4 range in gold?

Trading in gold is becoming a nightmare as slippage and microsecond moves just skew everything. Add up slippage on both sides of my trade today and you got about a $1.60 the dealer just pockets. Going forward, here at HotForex for sure and most likely at our new PAMM location, trading in gold I will use limit orders to get in a trade and floating stops to get out. I’m not willing to play the slippage game any longer.

Once we get into next week I believe you will see fund performance improve as I do more currency trades and less gold.

One has to wonder; can EURUSD and AUDUSD hold any kind of rally going forward before we go much lower? It very much looked and felt like a reversal day in both pairs was in the cards from around the start of Europe. Here’s the problem: gold is up $85 / oz in about 35 hours and EURUSD is down a few pips, but AUDUSD is down about 60 pips or so. Well, if gold rallies $85 and AUD is still lower, what’s it gonna take to get it higher?

AUD is down 12 out of the last 15 days, 6 days in a row, and so you would think with gold screaming up AUDUSD short covering would kick in and take it at least 100 pips higher. “Errrrrrr, no.”

Europe of course has its own problems, and more likely than ever, looks to go lower. It appears today EUR will close higher and we will see what the weekend brings, but rallies higher next week I will definitely sell.

At some point AUD will rally and more than likely it will be a sell there also. The problems in Europe and China really impact AUD and its economy. The fact that it can’t rally when gold rallies $85 in a very short period of time tells you all you need to know as AUD is considered a “commodity” currency.

The history of AUD will show that this currency pair can really run when there is a real change in the AUD economy. 1200 – 1500 pip [and more] straight runs have a common occurrence throughout the last 10 years of price action. Looking to buy AUD just because it’s been down 6 or 7 days in a row is dangerous.

Like Euro, I’m looking to sell any and all rallies here in AUD. It very much looks and feels it has a long way to go before it bottoms; and if China slows down [probable] and Europe implodes [highly likely] this pair could be sub 90 in no time flat. Looking at all the currency pairs, this looks to be the most overvalued pair I can see.

As most of you know I hate Friday trading; it has become the last hour of trading back before the internet took over and pit trading ruled. I refuse to get stuck in something that I can’t get out of and then have to hold over the weekend; this isn’t gonna ever happen. I’ll trade early and into the U.S. session, but before Europe closes I will at some point decide not to open any new positions.

I have been notified by our new brokerage house that some of you have opened new accounts and these accounts are awaiting funding. By the end of next week I am assuming some current PAMM clients will have accounts funded in the new PAMM. Sometime during the last week in May [starting the 28^th] I hope to start trading the new PAMM.

For new prospective clients to the new PAMM, send me an email if you are interested and I will send details.

Have a good weekend everybody.

-vegas

Update 3:15PM Chicago Time

In case you were wondering why I have Friday rules, I present EURUSD as prima facie evidence of what the Central Planners can do when conditions are thin and stops are on the plate. At 2:00 P.M. we had a melt up stop hunt in the EURUSD of about 60 pips within a few minutes on zero news.

Whatever can make your weekend can destroy your weekend. I wonder how many Euro traders are crying in beer as I write; only it won’t just last a few minutes, it will be there all weekend into the open on Sunday night. Been there done that once in 1980; ain’t ever happened since.

Sometimes it may seem to those who are new to trading and creating wealth that my methods can be restrictive and that I may miss some profit opportunities for no apparent reason. Lesson #1; first do no harm, then make money. I rest my case.

The Dow 30 closed near the lows of the day as FaceBook closed at $38. Another pump and dump scam Ma & Pa Kettle will eventually lose money.

Over the weekend [probably Sunday] I’ll have a special post. Tune in for details.

I WANT TO SCREAM

                                         I Might Just Do It

Go ahead, ask me how mad I am?

“How mad are you?”

“Don’t ask.”

There are days in this business that frustrate you so badly you want to permanently work in a feedlot picking up cow chips.

I went to buy gold in the 1550’s, and lo and behold what do I find? “Sorry, order invalid.”

They did it again to us – as if the prior two times wasn’t enough – they shut our access to the servers for trading. I don't know if it was a human that did it, or it was computer generated because we are US based and it shut the access; but I've been told on 2 prior occassions that it was fixed and there would not be a problem going forward. Try cashing that check at the bank. OK, they finally got it corrected – yea, like 50 minutes later when gold was then in the 1570’s. I so can’t wait to get rid of HotForex and get to a platform that is reliable and trustworthy.

So, if you were wondering why there were no trades today, you now know why; just your average $41 range, in which over half of it came in 15 minutes and we were shut down. Go ahead, ask me how mad I am?

On the bright side [if there is one], both AUD and EUR were locked into the currency version of the “Flying Wedge of Death” and I didn’t get involved in either of them. Maybe I could have made a couple of pips, but really it’s a coin flip to whether or not I would have profited. When gold flew out of the box, the currency pairs rallied but quickly lost that gain when gold backed off even by a slight amount.

Both pairs went back and forth from the highs back to the lows; no breakout, just some chop. So, lack of access to the platform was no big deal for the currency trade.

It takes a lot to really get me angry, and I understand the issues that plague this industry; but this borders on complete incompetence, and it isn’t something I suffer very easily. But since we are on are way out the door, nobody there really gives a hoot.

I got to go run 10 miles.

Have a good day everyone.

-vegas